Increased indebtedness leads to farmer suicides: NCEUS

New Delhi, Dec 21 : The consumption expenditure of marginal and small farmers exceeds their estimated income by a substantial margin and presumably the deficits have to be plugged by borrowing or other means.

Increased indebtedness is a major cause for the spurt in farmers’ suicides during recent times across a number of states, according a recent report of the National Commission for Enterprises in the Unorganised Sector (NCEUS).

A marginal farmer is defined as one having landholding less than 2.5 acre and a small farmer is defined as one having less than 5 acre.

In India, a majority of the farmers are marginal and small. The NCEUS headed by noted economist, Arjun Sengupta has recommended a Rs 5,000 crore special programme for marginal and small farmers with a view to insulate them from the adverse impact of the global financial crisis.

The average monthly income of all farmers is estimated at Rs 2,115. This monthly income ranges from Rs 1,659 for marginal farmers to Rs 9,667 for large farmers.

Poverty and social identity are co-related as in the case of scheduled castes and tribes, backward castes and Muslims.

The NCEUS report noted that many states including Punjab, Andhra Pradesh, Karnataka, Maharashtra and Kerala have recorded a spurt in distress driven suicides among farmers. In most, if not all such cases, the economic status of the suicide victim was very poor, being small and marginal farmers.

After the green revolution, agricultural activities have become cash-based individual enterprises requiring highinvestment in modern inputs and wage labour as is evident from the list of states withhigh incidence of farmers’suicides, which are not necessarily backward or predominantly agrarian or with low income, according to the NCEUS report.

“Increased liberalisation and globalisation have in fact led to a shift in the cropping pattern from staple crop to cash crops like oilseeds and cotton, requiring high investment in modern inputs and wage labour. This increases credit needs. But when the prices declined farmers have no means to supplement their incomes,” the NCEUS report noted.

Another problem is that unlike industrialists, farmers do not have access to debt relief under any law. Being indebted to the private moneylenders, they cannot go to public authorities to declare themselves insolvent or to get any kind of debt relief.

According the Situation Assessment Survey of Farmers-2003 about 48% farmer households had loans outstanding in 2002-03.

Incidence of indebtedness among farmer households was highest in Andhra Pradesh (82%), followed by Tamil Nadu (75%) and Punjab (65%). The NCEUS has therefore recommended wider coverage of farmers by institutional credit, with cheaper loans.